Zillow lost one of its biggest advertisers, Forecolsure.com, the company told investors on its conference call. That will hurt its display ad revenue. Zillow also expects to see a dropoff in customer activity in the fourth quarter, because it’s traditionally a slower time for home-buying.

But Canaccord Genuity analyst Michael Graham wrote that investors are overreacting to a generally strong report.

“All key metrics in the core Marketplaces business were ahead of expectations, and despite a few off-putting items in the Q4 guidance, we believe the after-hours decline in the stock presents a good entry point.”

Graham lowered his price target to $45 from $50, saying the company ought to trade at 35 times its 2016 EPS estimate of $2.

“We believe management is trading short-term profits for a stronger long-term competitive position against a very large market opportunity. We believe the core business is very healthy and improving.”

About Stocks To Watch

Earnings reports, corporate strategies and analyst insights are all part of what moves stocks, and they’re all covered by the Stocks to Watch blog. We also look at macro issues, investor sentiments and hidden trends that are affecting the market. Stocks to Watch gives you the full picture of the U.S. stock markets, all day long.

The blog is written by Ben Levisohn, a former stock trader who has covered financial markets for the Wall Street Journal, Bloomberg and BusinessWeek.